​As a clinical psychologist practicing in Westport CT, I work with many individuals who are heavily invested in the stock market. In fact, several of them work for financial institutions, be it a hedge fund, bank or advisory firm. For many of my patients, their bonuses are in some fashion tied to the performance of the markets. With so much at stake, it is no wonder that the stock market can affect how they experience their own sense of financial stability and well-being.

For some, who may have lost their job or been wiped out by margin calls, any resultant depression is grounded in reality. For others, however, whose losses are just on paper, their sense of despair is grossly exaggerated to the point of being an irrational fear about current and future prospects. They fail to see their losses as temporary. Their sense of self-worth has become totally dependent on how well they do in the market. These people suffer from what I call “Dow Affective Disorder.”

A person with “Dow Affective Disorder” experiences bipolar swings in mood as the market moves up and down. In a bull market they feel elated and invincible. They may spend freely, even to the point of living beyond their means. Some may even use leverage or credit to achieve a persona of grandeur. In a bear market, these individual may fall into a deep depression. They feel stressed out to the point of irrational panic. They fear the worst— financial apocalypse. Their self-esteem goes from good to bad. They feel like a failure and their excess spending grinds to a halt. They become overwhelmed with regret. “I should have sold before it crashed, what was I thinking, how can I be so dumb.” Just as they beat themselves for not being fully invested when the market is in an uptrend, they now torture themselves for not being smart enough to divest before the downturn occurred. They fail to see their losses as temporary and fall into despair.

In many instances their depressed mood causes a myopia and colors how they function and relate to others. They tend to withdraw from their families and friends and their focus narrows to only events related to the market. Rather than be with their children or complete work assignments, they are glued to the television watching a financial channel. They engage in self-defeating behaviors that intensify their sense of failure. For example, they panic and sell their holdings at a loss, which further confirms their sense of doom. They forget about the good times and feel as if their future will never be bright again. Their whole life style takes a dramatic shift — they feel poor, tighten their budget and radically reduce spending.

For most people, a stock portfolio performance signifies nothing more than the monetary value of an investment vehicle at a current moment in time. These people tend not to pay attention to the daily fluctuations in the market and perhaps only glance at their investment statements on a monthly or quarterly basis.

For those who suffer from Dow Affective Disorder, there is an irrational compulsive attachment to the stock market. They are hyper-vigilant to the split second movements of the market. They are glued to their phones and are watching the market throughout the day in real time. They are aware of how much they lost each day and continually think about their net worth. If the market spikes up they get a temporary rush, only to be crushed again when the rally dissipates later in the day.

For these individuals, the stock market has become more than a financial vehicle; it is an all encompassing obsession that controls all aspects of their lives. Their perspective of the stock market has become detached from reality and at time can resemble a delusion. Their portfolios no longer just signify the value of money, but rather it now also signifies how they value themselves as a person. How they do in the market becomes more of a symbolical signifier of self worth and less about how they will meet their financial obligations. The signifier and the signified has become displaced and the stock market has now attached to an imaginary internalized scoreboard by which one’s sense of self worth is judged. If the stocks they own are worthless then they as individuals are worthless is the kind of distorted thinking that leads to generalized despair.

The psychological pain associated with this disorder can have long term psychological effects. Like most depressive disorders, it can lead to symptoms such as gastrointestinal distress, back or neck pain, insomnia, change in appetite, decrease in libido, poor concentration and even suicidal ideations. It can destroy families and careers.

To ask for help is not easy for a person plagued by hopelessness and low self-esteem. However, it is essential for a person suffering from these issues to seek professional treatment and learn more adaptive ways of being. Nobody likes losing money, but cycles of severe emotional ups and downs are harmful both to one’s pocketbook and long term health.

Dr. Klein is a clinical psychologist who practices in Westport CT. In addition to being a psychologist, he is also an executive coach who specializes in working with people in the finance industry.